More than two dozen aid and campaign groups within and outside Ghana called on international creditors on Wednesday to erase a substantial percentage of country’s debts as it grapples with unending economic crises.
Consumer inflation in Ghana increased to 54.1% year on year in December, owing to rising fuel, utility, and food prices.
International reserves have shrunk to fewer than two months’ worth of imports.
“The people of Ghana have suffered extensively from the crisis,” the groups, all of which have operations in Ghana, said in an open letter.
After declaring that it would default on most of its external debt at the end of last year, the government requested that its bilateral debt be restructured through the G20 common framework platform earlier this month.
Ghana is poised to miss a $41 million interest payment due on Wednesday on a $1 billion eurobond. According to the finance ministry, interest payments have climbed to between 70% and 100% of government revenue.
“Ghana’s lenders, particularly private lenders, lent at high-interest rates because of the supposed risk of lending to Ghana,” the letter said.
“Given that they lent seeking high returns, it is only right that following these economic shocks, private lenders willingly accept losses,” it noted.
The letter’s signatories, which included Oxfam, Christian Aid, Caritas Ghana, Debt Justice, and ActionAid, stated that the main problem was convincing private lenders to agree to a major debt cancellation.
Ghana initiated a local debt swap plan in early December, only days after reaching a staff-level agreement with the International Monetary Fund (IMF) for a $3 billion bailout package.
The IMF’s board has stated that it will only support the arrangement if Ghana undergoes extensive debt restructuring.
The registration date for the local debt swap, the Domestic Debt Exchange has been extended three times as officials attempt to convince bondholders to join in the program.